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Century Aluminum (CENX) Loss Lower Than Expected in Q2
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Century Aluminum (CENX - Free Report) incurred net loss of $9.5 million (or 11 cents per share) in second-quarter 2016. Last year, it had posted a loss of $33.9 million (or 39 cents per share).
Barring one-time items, Century Aluminum’s adjusted net loss was 5 cents per share in the quarter, narrower than the Zacks Consensus Estimate of a loss of 9 cents.
Century Aluminum’s shares closed around 7.5% higher at $7.59 on Jul 29.
Revenues and Shipments
The company logged revenues of $326.8 million in the reported quarter, down around 37.6% year over year. Sales also missed the Zacks Consensus Estimate of $348 million. Shipments of primary aluminum in the quarter were 185,567 tons, down roughly 20.7% from 233,950 tons shipped a year ago.
Financials
Century Aluminum ended the quarter with cash and cash equivalents of around $129.4 million, roughly 22.7% down year over year. Net cash provided by operating activities was $8.7 million in the second quarter, down about 92.1% year over year.
Market Sentiment
The company's President and CEO – Michael Bless – stated that geopolitical uncertainty and volatility have persisted so far this year. Additional distortions in the currency markets and in interest rates have further pressured commodities prices. Nonetheless, aluminum price has been relatively better. Demand in the end markets remains strong and is expected to be so, barring some exceptions.
Supply has been mostly static over the past few months. Production is expected to increase considerably in China during the second half of the year from new capacity as well as from the restart of curtailed plants. The primary aluminum industry in China continues to be boosted by state support, which is illegal under global trade rules. The company strongly believes that it is now high time that action is taken to counter this critical issue, which poses considerable danger to the U.S. aluminum industry.
Century Aluminum reached a new agreement with a third-party supplier to purchase the majority of electric power required for its Mt. Holly smelter. However, the company continues to be required to purchase 25% of the plant's power consumption from the state-owned provider. The company, thus, requires a structural change in its electric power arrangements in South Carolina and the achievement of this goal would also allow it to restart the half of the plant that is currently idled.
Century Aluminum currently holds a Zacks Rank #3 (Hold).
Some better-ranked companies in the basic materials sector include Global Brass and Copper Holdings, Inc. , Norsk Hydro ASA (NHYDY - Free Report) and Worthington Industries, Inc. (WOR - Free Report) , all holding a Zacks Rank #2 (Buy).
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Century Aluminum (CENX) Loss Lower Than Expected in Q2
Century Aluminum (CENX - Free Report) incurred net loss of $9.5 million (or 11 cents per share) in second-quarter 2016. Last year, it had posted a loss of $33.9 million (or 39 cents per share).
Barring one-time items, Century Aluminum’s adjusted net loss was 5 cents per share in the quarter, narrower than the Zacks Consensus Estimate of a loss of 9 cents.
Century Aluminum’s shares closed around 7.5% higher at $7.59 on Jul 29.
Revenues and Shipments
The company logged revenues of $326.8 million in the reported quarter, down around 37.6% year over year. Sales also missed the Zacks Consensus Estimate of $348 million. Shipments of primary aluminum in the quarter were 185,567 tons, down roughly 20.7% from 233,950 tons shipped a year ago.
Financials
Century Aluminum ended the quarter with cash and cash equivalents of around $129.4 million, roughly 22.7% down year over year. Net cash provided by operating activities was $8.7 million in the second quarter, down about 92.1% year over year.
Market Sentiment
The company's President and CEO – Michael Bless – stated that geopolitical uncertainty and volatility have persisted so far this year. Additional distortions in the currency markets and in interest rates have further pressured commodities prices. Nonetheless, aluminum price has been relatively better. Demand in the end markets remains strong and is expected to be so, barring some exceptions.
Supply has been mostly static over the past few months. Production is expected to increase considerably in China during the second half of the year from new capacity as well as from the restart of curtailed plants. The primary aluminum industry in China continues to be boosted by state support, which is illegal under global trade rules. The company strongly believes that it is now high time that action is taken to counter this critical issue, which poses considerable danger to the U.S. aluminum industry.
Century Aluminum reached a new agreement with a third-party supplier to purchase the majority of electric power required for its Mt. Holly smelter. However, the company continues to be required to purchase 25% of the plant's power consumption from the state-owned provider. The company, thus, requires a structural change in its electric power arrangements in South Carolina and the achievement of this goal would also allow it to restart the half of the plant that is currently idled.
CENTURY ALUM CO Price, Consensus and EPS Surprise
CENTURY ALUM CO Price, Consensus and EPS Surprise | CENTURY ALUM CO Quote
Zacks Rank
Century Aluminum currently holds a Zacks Rank #3 (Hold).
Some better-ranked companies in the basic materials sector include Global Brass and Copper Holdings, Inc. , Norsk Hydro ASA (NHYDY - Free Report) and Worthington Industries, Inc. (WOR - Free Report) , all holding a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>